Considering the improving outlook for the UK economy, I’ve been looking for dirt-cheap shares to add to my portfolio recently. I’m looking for stocks that I can buy and hold for a least the next decade, so I don’t have to worry about finding new investments.
Research also shows that buying and holding stocks can produce better returns in the long term, although this isn’t guaranteed. This strategy might not suit all investors.
Still, I’m comfortable with the level of risk involved with this kind of strategy. With that in mind, here are two dirt-cheap shares I’d buy with the view to holding them for the next decade.
Recruitment consultancy Robert Walters (LSE: RWA) has reported a substantial decline in the demand for its services over the past year. As a result, investor sentiment towards the business has plunged.
However, I’m willing to look past these short-term headwinds. I think there’ll always be a need for the recruitment services Robert Walters provides. And while the firm might have seen a drop off in demand over the past 12 months, I think this demand will return as the economy recovers.
That’s why I’d buy the stock as part of a portfolio of dirt-cheap shares today. That said, this business isn’t without its risks. Recruitment is a highly cyclical business, as we’ve seen over the past 12 months. The company’s size will help it weather periods of uncertainty, but any reputational damage could destabilise the business.
As such, while I’d buy the stock to hold for the next decade, I plan to keep an eye on these challenges.
Property market growth
The UK property market is hugely important to the country’s economy. The market is highly cyclical, but some sections are more stable than others.
That’s why I’d buy LSL Property Services (LSE: LSL) as part of a portfolio of dirt-cheap shares today. This company provides a range of services for the property sector, including residential sales, lettings, surveying, conveyancing and advice on mortgages and non-investment insurance products.
I think this could be one of the best ways to invest in the property sector, aside from buying a property directly.
After recent declines, shares in LSL are trading at a P/E of 9.7, based on City estimates for 2020. That’s compared to the market average of 16. Of course, these are just estimates at present, and there’s no guarantee the company will hit these targets. That’s one of the risks of investing here.
The corporation may also suffer if the UK property market takes a turn for the worst. Its diversification may help the business with uncertainty, but a sudden slump in house prices would almost certainly impact the company.
I plan to keep an eye on these risks over the next few years. But despite the challenges the group faces, I’m incredibly optimistic about its long-term potential. That’s why I’d add the stock to my portfolio of dirt-cheap shares today.
Rupert Hargreaves has no position in any of the shares mentioned. Please to dirt cheap shares could be a attractive addition to any portfolio for the next decade has been looking for dirt cheap shares to add to his portfolio with the goal of holding the next 10 yearsThe Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.